Prudent nudges may encourage charitable giving

AMID the unprecedented Covid-19 crisis and the Singapore government's subsequent drawdown on reserves to fund the Resilience and now, Solidarity, Budgets, Deputy Prime Minister Heng Swee Keat announced that all adult Singaporeans will receive a one-off cash payment of S$600.

Apart from the government's fiscal stimulus efforts to ameliorate the socio-economic fallout from Covid-19, however, we must also acknowledge the heavy workload that voluntary welfare organisations (VWOs) and charitable organisations will likewise shoulder in the coming months. The good work done by these organisations is often funded by private donations. As such, in announcing the government's relief measures, DPM Heng was also quick to add: despite the universal nature of these payments, he encouraged those with the financial means to consider donating to social giving portals such as giving.sg.

In encouraging greater public charitable giving amid the Covid-19 crisis, the government may draw on the useful precedents set through its use of nudging in other areas of public policy. The concept of nudging in public policy builds on the work of Professors Richard Thaler and Cass Sunstein at the University of Chicago, who popularised nudge theory - a form of choice architecture with the goal of influencing an individual's or group's behaviour.